A joint meeting of the House and Senate health committees only needed half the time it had allotted to listen to a proposal about changing state employee healthcare.

Apparently mindful of the deluge of retirees who reacted angrily to news in 2022 that the state was moving retirees to a Medicare Advantage plan, the joint meeting planned to run from 2 p.m. to 5 p.m. Monday.

Only nine retirees asked to address the hearing and most of them thanked the Retiree Healthcare Benefits Advisory Subcommittee exploring insurance options for going above and beyond and seeking to find long-term solutions.

All of them said thank you to the committee. 

Garry Bodine, a school custodian, testified that he worked three jobs and stayed with the state even though he could have made more money elsewhere because he valued the benefits.

Rebecca Scarborough, a member of the retiree activist group RISE Delaware, said she had something to confess to the health committees.

“When the committee was first formed and talked about, I wrote in opposition to it,” she said. “It was a way I felt to appease the more than 30,000 retirees. And I was wrong. Because the committee was fantastic.”

The retiree committee met throughout much of 2023 and in early January issued its recommendations.

No 1: Never put Delaware state employees on a Medicare Advantage plan.

Lt. Gov. Bethany Hall-Long, a public health nurse who is running for governor, described the committee’s processes and its reasons for its recommendations, many of which have to be approved by the General Assembly.

She didn’t want the study to just sit on a shelf, she said, and the committee would be holding several public meetings to familiarize employees, retirees and the public with the multi-pronged plan.

“We really have an opportunity with a bold plan to really be able to move forward to really protect and preserve our retirees health,” she said, “which will implicate health care for current employees as well as future retirees. So this is an incredible window of opportunity.”

The committee did not want to just solve this issue that had so incensed state retirees that they formed a group and sued the state over the change, Hall-Long said.

It wanted to do right by current employees just starting their careers, employees who were approaching retirement and retirees, she said.

Retirees health recommendations

In addition to ditching the Medicare Advantage plan, the group also recommended the state:

• Continue to contribute 1% of the general fund budget from the prior year to the Other Post Employment Fund, commonly called OPEB, which pays for retiree healthcare. It is massively underfunded now, a point that outside financial analysts often refer to as a worry and liability.
• Increase OPEB pre-funding from 0.36% of payroll to 0.5%, then increase by an additional 0.25% of payroll each fiscal year until it reaches 10%.
• Ensure that current Medicare-eligible and pre-Medicare state retirees and state employees who retire prior to Jan. 1, 2025 will be entitled to Special Medicfill/Rx benefits with no changes to the state share percentage of payments when they are Medicare eligible. That’s the plan retirees didn’t want to lose.
• Limit changes to plan design, eligibility requirements, or contribution share/percentage to workers hired on or after Jan. 1, 2025.
• Solicit public comment before the retiree health committee votes to adopt the final request for proposal for retiree healthcare plans.
• Research and measure the cost of state-sponsored healthcare benefits for three subgroups: current workers, eligible pensioners who are ineligible for Medicare, and eligible pensioners who are eligible for Medicare.
• Address the issue of healthcare pricing in Delaware, including statutory, regulatory and administrative changes in 2024 to bring more transparency, consistency, affordability and sustainability to healthcare prices and price growth.

Several comments from legislators indicated they are looking further afield than what the retiree committee recommended.

Rep. Mike Smith, R-Pike Creek, complimented the committee and said he thought their work pointed to the need for a look at cost and pricing in Delaware, as well the need for more providers in every medical field, including another major insurance company.

Rep. Paul Baumbach, D-Newark, who was a committee co-chair, said he wasn’t able to attend, but wrote a letter read by Rep. Cindy Romer, D-Newark.

In it, he said Sen. Brian Townsend, D-Newark, another co-chair, also is exploring “the unfair cost of inpatient and outpatient care in Delaware compared with neighboring seats.”

“We’ve studied this many times in the past decade. And we know what we need to do,” Baubach said. “We need to build up our resolve to take the hard steps to bring our medical costs down both for Delaware retirees and for Delaware employees. And for frankly all Delaware residents.”

He also argued that the Highmark Medicare Advantage plan offered by Delaware would not have been a state offering and the state would not have been paying for it. The state would be acting as a broker to introduce retirees to the plan, which would be funded by the retirees giving up their traditional Medicare benefits.

The state would not have paid a cent, he said.

“There is a benefit that the state is providing, not simply a sales lead to a private health insurance company,” he said.

Rep. Jeff Hilovsky, R-Long Neck, an optometrist who ran the Sussex Eye Center, said he was hopeful that costs of health care would come down in the future because artificial intelligence and technology may make it possible for patients and medical professionals to be proactive rather than reactive. as well as making testing easier and less expensive.

“So I think that there’s a lot of a lot of bright spots we can look forward to,” he said.

Delaware spent $1.1 billion on diabetic care last year, between state insurance plans, Medicaid and Medicare, he said.

“A 5% shift in that situation just for diabetes alone would realize a savings of $55 million a year,” he pointed out.